Santos Sells Victorian Gas Assets to Cooper Energy for A$82mn

As part of rationalisation of its assets, Santos has entered an all cash deal to sell its Victorian assets to Cooper Energy for upto A$82mn (US$67mn). The sale will result in Santos exiting from offshore Victoria, the company said October 24. In March 2016, Santos completed the sale of its interest in the Kipper gas field for A$520mn.

The assets sold to Cooper Energy include 50% interest in the Casino-Henry gas project, 50% interest in the Sole gas field and the Orbost gas plant. Cooper was in a 50:50 joint venture with Santos for the Sole gas project. Cooper will also get 10% interest in the Minerva gas field and gas plant and 100% interest in the Patricia-Baleen gas field. Santos’ share of production from these assets in the first half of 2016 was 5.2 PJ of sales gas.

Santos will get A$62mn at completion of the deal. It will get a further milestone payment of A$20mn when the Sole final investment decision is made or if Cooper sells down any of the other Victorian assets. Completion of the deal is expected in early 2017.

The acquisition will give Cooper Energy an immediate and substantial uplift in its production, reserves, technical, engineering and project management capabilities. Cooper will immediately become a supplier to the south-east Australia gas market and diversify its revenue mix away from its historical reliance on oil. Cooper Energy anticipates completion of the transaction will lift its Australian production by almost four time in FY17 to 1mn boe, Cooper said.

Sole Gas Project

Cooper said preparations for a FID are progressing well and first gas from the project is planned to be delivered in the March quarter of 2019, unchanged from previous indications. “By giving Cooper Energy 100% equity ownership of the Sole gas project, the transaction will allow optimal funding arrangements to be settled for the project, which may include partial divestment of Cooper Energy’s 100% interest. If necessary, without impacting first gas delivery targets, FID can be deferred into the March quarter of 2017 to secure optimal financing arrangements for the Sole gas project,” Cooper said.

Shardul Sharma